Greenwashing will soon not only have consequences for the environment, but also for companies
Greenwashing as a marketing ploy will face companies in the EU with strict sanctions in the future, because in order to put an end to advertising with untrue environmental claims, the EU Commission presented the so called "Green Claims Directive" in March 2023. This article deals with what companies need to know about this.
Regulations on the accuracy of communicated sustainability claims have not existed in the EU until now. So-called greenwashing, i.e. giving a "green" image, is a popular marketing ploy to make customers believe that they are making an environmentally friendly choice by buying a product. A study by the European Commission (2020) found that 53.3% of environmental claims made in the EU are misleading, and 40% cannot be factually substantiated.
For this reason, on 23rd of March 2023, the European Commission published a proposal for a directive against advertising that aims to portray a product, service or company as "greener" than it actually is, in order to combat greenwashing. This proposed directive is called the "Green Claims Directive".
All companies that make claims about the environmental performance of their products, services, or the company itself are affected.
The proposed directive advocates that:
Micro-enterprises with fewer than 10 employees and an annual turnover of no more than €2 million are exempt.
Furthermore, companies can expect a boycott by customers whose trust in the company has been abused by greenwashing marketing.
The proposed directive currently has to go through the EU legislative process. After that, the EU member states have 18 months to incorporate the directive into their national law. After that, another 6 months may pass until the provision finally enters into force.
Already now, companies can carefully review their sustainability practices, claims and communications to identify and avoid any misleading communications.
Engaging with stakeholders such as customers, employees and investors can help companies better understand sustainability expectations and requirements. Through dialogue and stakeholder engagement, companies can demonstrate their commitment to transparency and sustainability and receive valuable feedback to continuously improve their practices.
Employee education in ESG helps to raise awareness of environmental and social sustainability within the company, thus strengthening motivation for genuine sustainability efforts rather than greenwashing.
Our Glacier Climate Academy offers this education in the field of anti-greenwashing in the Climate Protection Essentials module of the same name. Get started now and master truthful environmental communication together with the entire staff!